By Executive Editor
The National Social Security Fund – NSSF –has explained circumstances under which the Fund bailed out a loss-making Uganda Clays with Shs 11.5 billion between 2007 and 2008.
In a one-on-one interview with NTV’s Raymond Mujuni last Saturday, the Fund’s acting Managing Director – Patrick Ayota said “I am glad you raise the question on Uganda Clays.”
Earlier, the NSSF had appeared before a Committee of Parliament and was tasked to explain the Uganda Clays bailout.
Ayota explained during the interview with Mujuni that “NSSF bought shares (in Uganda Clays” at IPO in 2001 and that currently, “We own 33% on Uganda Clays. “
So, he said, “in 2007/08, Uganda Clays began expansion and at that point NSSF says okay, we will lend you 11.5 billion shillings.”
“I remember I think they only made one payment then they defaulted. The question is, why did you put 11 billion shillings in a lose-making entity? Because they have prospects, and the Company has not died. And by the way, it is striving even better and I will tell you something, that (bailing out Uganda Clays) is something that NSSF did that members ought to be very proud of. If it had been a private Bank that had 11 billion shillings in Uganda Clays in 2010, and Uganda Clays didn’t pay in two-year’s time, they would have foreclosed on Uganda Clays. What would have been the implication of that? It would mean the following: Today, Uganda Clays employs over a thousand people. That would be no more. Today, Uganda Clays continues to remit 1.5 billion to NSSF. That would be no more. The 33% we own in Uganda Clays would have been no more. More importantly, we have now rescheduled the loan. The loan is a secure loan plus all the arrears and they will pay. Secured by land…Uganda Clays is now vibrant….It’s begining to work out. It’s called patient capital,” Ayota said.
According to Ayota, “when you look at Pensions, you don’t look at just a short term, you take a long term view but for the sake of this nation, thank God NSSF did that because that company, the first company we listed would have been no more….”
“We promised to grow this Fund to 20 trillion shillings by 2025, guess what, we are now 18 trillion and we still have two years out and we will deliver that. We want our members at 95% satisfaction rate. Today, we are at 83% and we know that the other gap is like, and we are going to deliver on that. So, every strategic promise we have made to our member, we have kept in totality. Now, most people think that when you invest, you need to get everything 100% right. We are human beings. Any decision that you make that involves tomorrow, has an uncertainty in it, because tomorrow’s dynamics you don’t know so you are making the best decision, with the best information you have knowing very well that it is partial information, not full information. You have full information in 2020. The future is all about uncertainty and you make the best decisions. Some of the investments will do very well, some will not do very well but in totality, the fact that the Fund has grown from 1.7 trillion to now 18 trillion shillings tells you that we have made more right decisions than wrong decisions.”
